Another Coder just released a plugin that allows WordPress users to get rid of the “category” directory in top category URLs.
So for example, the URL for my Google Analytics How-To category now looks like this:
http://www.seoracle.com/google-analytics-how-to-tutorial
Instead of this:
http://www.seoracle.com/category/google-analytics-how-to-tutorial
In addition to this, the old URL (with the “category” directory) now 301 redirects to the new one.
You can download the tool here.